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Honorable Lee M. Jackwig - Decisions

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09/30/2011

In re: Al Dwaine Larson (Case No. 08-04668, Filed 11/26/08)

Creditors' objection to Debtor's claim of a homestead exemption where Debtor and his non-filing spouse had changed the form of their ownership of the property after Debtor signed a guarantee agreement was overruled.

04/04/2011

In re: Donald C. Braathun (Case No. 07-00771, Filed 03/19/07)

11 U.S.C. section 707(b) motion to dismiss was denied because U.S. Trustee had failed to carry its burden of proving that the debts were primarily consumer debts. Relying on its prior docket text ruling in Matter of Burrell, No. 08-00898-lmj (Bankr. S.D. Iowa Oct. 1, 2010), the Court also emphasized that U.S. Trustee had improperly treated the case as a joint filing when considering abuse under the bad faith prong of 11 U.S.C. 707(b)(3).

U.S. Trustee's 11 U.S.C. section 707(b) motion to dismiss on the grounds that a presumption of abuse arose under 11 U.S.C. section 707(b)(2)(A) because Debtors did not pass the statutory means-test and that the filing constituted an abuse under section 707(b)(3) was granted. The Court rejected Debtors' argument that relocating from eastern Nebraska to a larger home in western Iowa to accommodate the purported needs of their large household resulted in extraordinary commuting expenses constituted special circumstances to rebut the presumption of abuse. Also, the Court found that dismissal of the case was also appropriate on the 707(b)(3) ground because Debtors' actual monthly expenses were unreasonable given their household situation.

11 U.S.C. section 707(b) motion to dismiss was granted. The Court concluded that Joint-Debtor could not claim that repayment of student loan debt constituted a special circumstance that rebutted the presumption of abuse.

Trustee's motion to dismiss under section 707(b) was granted unless Debtors filed a motion to convert their case to a Chapter 13 case. Reductions in Debtors' expenses would result in a recovery of between $42,660.00 and $71,100.00 over a five year Chapter 13 plan.

Iowa Code section 627.6(1) did not permit Debtors to claim as exempt a replacement setting for an engagement ring acquired after Debtors' marriage.

10/02/2006

In re: Dennis E. Campbell (Case No. 03-06108, Filed 10/14/03)

Debtor failed to establish by a preponderance of the evidence that the redemption value of a vehicle should be its wholesale value.

10/02/2006

In re: Crestland Cooperative (Case No. 01-05005-lmj, Filed 09/26/01)

Creditor filed a claim in Debtor's Chapter 11 case and a claim in Debtor's subsidiary's Chapter 11 case. When the subsidiary's case was dismissed, Creditor attempted to amend its claim in Debtor's case to include the claim originally filed in the subsidiary's case. The Court agreed with the trustee's contention that any liability incurred by Debtor as a result of a contractual obligation of the subsidiary was a separate claim and denied Creditor's motion for leave to amend its proof of claim.

Debtor failed to file sixty days' worth of payment advices within forty-five days of the petition date so the Court dismissed the case sua sponte on the forty-sixth day. Upon a motion for relief from order, the Court reviewed the matter and held it would no longer dismiss deficient 11 U.S.C. section 521(a)(1)(B) cases sua sponte.

Debtors originally executed a promissory note and security agreement providing them with a line of credit. Later Debtors executed a Small Business Administration note and security agreement. The Court declared the two transactions were so closely aligned that it acted as a single financing agreement; thus, Creditor had a purchase-money security interest.

10/04/2004

In re: Phelan Rico Thomas (Case No. 03-01003, Filed 03/04/03)

When Chapter 13 debtors did not meet the three elements of economic duress, the Court held they could not assume the terms of a lease agreement because the lease termination agreement they entered into did not become voidable.

Court overruled trustees objection, allowing joint debtors the full exemption under Iowa Code Section 627.6(9)(b) for two vehicles under a statutory analysis involving the definition of `motor vehicle`. Though the vehicles were currently disassembled, with a negligible amount of work they could become operable.

04/02/2004

In re: John N VanZandt (Case No. 02-01078, Filed 03/06/02)

Creditor filed a filed a Proof of Claim indicating it held an unsecured claim for a breach of a lease agreement when Chapter 13 debtor filed for bankruptcy 2 days prior to state court date. Under an examination of Iowa landlord-tenant law and the bankruptcy code, the Court held that the unsecured, non-priority claim of the Creditor was allowed at a reduced rate.

01/15/2003

In re: Timothy Francis Hoover (Case No. 01-01322, Filed 03/23/01)

Defendant's daughter obtained a state court judgment against plaintiff, and plaintiff in turn obtained a state court judgment for indemnification against defendant. Defendant was co-conservator for his daughter. Defendant presented a conservatorship certificate of deposit to plaintiff for payment, and re-ceived a cashier's check in exchange. The conservatorship had in fact expired, and defendant did not turn over the funds to his daughter. Plaintiff sought to have its judgment declared non-dischargeable. Under FRBP 7052, plaintiff's case-in-chief must establish a prima facia case to defeat defendant's motion for a directed verdict. A creditor must prove all elements of the test to prevail on an 11 U.S.C. section 523(a)(2)(A) dischargeability action. Creditor must prove the debtor was acting in a fiduciary capacity with respect to that creditor for the debt to be nondis-chargeable under the defalcation prong of section 523(a)(4). The embezzled property must have belonged to the plaintiff for the defendant's debt to be nondischargeable under 523(a)(4). Creditor must prove the debtor was acting in a fiduci-ary capacity with res-pect to that creditor for the debt to be nondischargeable under section 523(a)(11).

Objection to homestead exemption by antecedent claim holder and trustee sustained. Under Iowa Code sections 561.7, 561.16, 561.20 and 561.21(1), after debtors moved from property A to property B, the debtors' move back to their property A after acquiring debt is not a change of homestead or a new homestead such as to defeat the antecedent debt provision of Iowa Code section 561.21(1).

The Court did not take alleged substantial debt service on home into account in calculating reasonably necessary expenses in the context of an 11 U.S.C. section 707(b) motion. Debtors had not amended their statement of intention (from intention to surrender homestead to intention to retain homestead by reaffirming two mortgage debts against it) timely. Under the facts of the case, the Court would not have found the amendment credible had it been filed timely. 265 B.R. 179 (Bankr. S.D. Iowa 2001)

Intervention by right was not proper under Rule (a)(2) because applicant did not establish that claim for recovery of contract payments under FTC Holder Rule provision would be impeded or impaired by disposition of pending action. Permissive intervention was not proper under Rule 24(b)(2) because claim had no question of law or fact in common with the pending action, and would not be guaranteed a quicker resolution in this forum than in another. Intervention by right and permissive intervention were proper for constructive trust claim.

11 U.S.C. section 707(b) motion to dismiss was granted because U.S. trustee overcame statutory presumption in favor of granting chapter 7 relief. Controlling circuit case law does not require trial court to find a debtor can repay a specific threshold of unsecured debt within three to five years. 253 B.R. 54 (Bankr. S.D. Iowa 2000)

Creditor's allegations in support of motion to dismiss Chapter 7 case either failed to establish cause under 11 U.S.C. section 707(a) or fell under an 11 U.S.C. section 707(b) cause of action. The creditor lacked standing to bring the latter and neither the Court nor the U.S. Trustee could act upon the creditor's request or suggestion.

Homestead exemption within city plat included: house used as a home by the debtors and garage used to store one of the debtor's cars; one building worth no more than $300.00 and used in the debtors' business; and, subject to the one-half acre limitation and excluding the land upon which nonexempt buildings stood, three contiguous lots. 246 B.R 881 (Bankr. S.D. Iowa 2000)

11 U.S.C. section 305 abstention appropriate where plaintiff did not dispute her jeopardy drug stamp federal tax debt was nondischargeable but did challenge the validity and amount of that tax, where debtor had other avenues of relief, and where the bankruptcy estate had no stake in the outcome of the controversy.

Reaffirmation agreement, executed after the general discharge was entered, could not be approved by the Court.

04/01/1999

In re: Jennifer Lynn Johnson (Case No. 97-05414, Filed 12/01/97)

Debtor's interest in federal earned income credit for a particular tax year is property of estate under 11 U.S.C. section 541 even when the petition is filed before the end of the applicable tax year.

09/28/1998

In re: Eric J. Ersland (Case No. 98-00695, Filed 02/24/98)

Case was dismissed without prejudice where debtor submitted final installment fee payment more than 180 days after filing his petition contrary to Fed. R. Bankr. P. 1006 (b) (2) and 9006 (b) (3). Debtor may seek return of the final installment upon written request to the Clerk's office but will remain liable for the amount. Compare LMJ #187.

To recover actual damages pursuant to section 362 (h), an injured individual must establish he was injured by violation of the stay and that the violation was willful. An award of costs and attorney's fees is inappropriate in the absence of an award of actual damages. To recover punitive damages, the debtors must establish the violation of the automatic stay amounted to egregious intentional misconduct.

Federal bankruptcy law and policy do not preempt Iowa Code Section 537.7103 (5) (e). Creditor sending debtor copy of the letter it sends debtor's counsel regarding reaffirmation of unsecured dischargeable debt amounted to an act to collect a debt under either 11 U.S.C. section 362 (a) (6) or section 524 (a) (2) and under Iowa Code section 537.7103 (5) (e). (Caution given about submission of reaffirmation agreements without 11 U.S.C. section 524 (c) (3) affidavit of the attorney of record for the debtor.) Aff'd Greenwood and Discovery v. Smith, 212 B.R. 599 (8th Cir. BAP 1997). Appealed to the U.S. Court of Appeals for the 8th Cir. from the opinion of the U.S. Bankruptcy Appellate Panel of 10/08/97. (Also included as consolidated appeals Montsko, Adv. 95-95078 and Lenahan, Adv. 95-95079.) Appeals dismissed by the U.S. Court of Appeals for the 8th Cir. (Civil Nos. Smith 97-6006; Lenahan 97-6007 and Montsko 97-6008.)

Federal Rule of Bankruptcy Procedure 4004(b) did not prevent United States Trustee from specifically requesting an extension of time to object to the general discharge on behalf of all parties in interest and facts of case warranted granting the extension as requested.

Omission of specific deadline for filing objections to discharge and complaints to determine dischargeability of debt in the form notice of commencement of case did not suspend the running of the 60-day limitation established by Federal Rules of Bankruptcy Procedure 4004 (a) and 4007 (c).

08/29/1995

In re: Damien Gregory Dassie (Case No. 95-01536, Filed 05/25/95)

Reaffirmation of prepetition attorney's fee agreement not approved for failure to meet the requirements of section 524 (c) (2) and (3). Local bar date notice procedure found insufficient where attorney sought to have clients reaffirm prepetition attorney's fee agreement. Attorneys who make such request must request a hearing under section 524 (d).

Case was dismissed without prejudice and discharge entered in interim was revoked where debtors tendered payment more than 180 days after filing their petition contrary to Federal Rules of Bankruptcy Procedure 1006 (b) (2) and 9006 (b) (3).

Creditor's motion for extension of time for filing a reaffirmation agreement was denied based on the last sentence of Federal Rule of Bankruptcy Procedure 4004 (c) that permits a debtor, not a creditor, to file such a motion.

Debtors' motion to dismiss the pending Chapter 7 case in order to add the postpetition creditors in a refiled Chapter 7 case was denied. Since they failed to give the potential creditors opportunity to object to their motion as required by procedural due process, debtors did not establish cause for dismissal under section 707 (a).

Trustee's objection to debtors' exemption claim for worker's compensation settlement was sustained. Under the test adopted in In re Pettit, 55 B.R. 394 (Bankr. S.D. Iowa 1985), aff'd 57 B.R. 362 (S.D. Iowa 1985), the settlement agreement was not, for purposes of Iowa Code section 627.6 (8) (e), a "pension, annuity, or similar plan or contract," which must be in existence and a payment must be triggered by an event contemplated by that plan or contract. Aff'd, Midkiff v. Peterson No. 1-94-CV-80024, slip op. (S.D. Iowa, filed August 10, 1994).

04/22/1994

In re: Larry Lee Lynch (Case No. 93-02300, Filed 09/10/93)

Iowa Code section 627.6 (9) (c) limits the debtor's earnings exemption under section 642.21 to $1,000.00, and that was the extent to which he could avoid the judicial lien held by the creditor.

02/24/1993

In re: R. Mary Thomas-Gallet (Case No. 92-02452, Filed 08/12/92)

Creditor's motion to abstain from exercising jurisdiction and to dismiss as to the controversies between the creditor and the debtor scheduled in the Chapter 7 case found to be moot and denied where no adversary proceeding had been commenced under 11 U.S.C. section 523(a), the trustee had fully administered the Chapter 7 case, and the general discharge had been granted.

02/17/1993

In re: Denise R. Spinner (Case No. 92-03465, Filed 11/18/92)

Case dismissed where Chapter 13 debtor failed to satisfy order to show cause why case should not be dismissed for failure to pay filing fee. Debtor's request to pay filing fee from plan payments held by the trustee, awaiting confirmation of the plan, denied as being at odds with the statutory scheme.

02/17/1993

In re: (Case No. 92-02967, Filed 10/05/92)

Where no Chapter 13 plan had been confirmed and case was converted to Chapter 7 prior to hearing on order to show cause why case should not be dismissed for failure to pay filing fee, court found cause to extend time to comply to a period beyond 120 days but within 180 days as permitted by Federal Rule 1006(b)(2) of Bankruptcy Procedure. Debtor's request to pay filing fee from plan payments held by the Chapter 13 trustee was denied. 11 U.S.C. section 1326(a)(2) does not permit the trustee to pay the 28 U.S.C. section 1930(a)(1) filing fee. Administrative expense claims under 11 U.S.C. section 503 (b) do not encompass filing fees.

Motion to vacate order granting relief from stay denied because controversy was moot by operation of law. 11 U.S.C. § 362(c). Dicta emphasized objections to bar date noticed motion should be filed within the time frame set forth in the served notice, even if the underlying motion was not filed on the date originally submitted. Local Rule 14(b) and (d).

Although a Chapter 13 amended plan before confirmation must be filed when submitted, the debtors must otherwise comply with Local Rule 14(2)(C) by filing a motion to modify the plan, a bar date notice regarding the motion, a certificate of service and a proposed order granting the motion.

05/02/1991

In re: Roger Gene VanHoff (Case No. 90-02940, Filed 11/13/90)

Iowa State Penitentiary was not precluded from withholding restitution payments from debtor's pay after Chapter 7 general discharge was entered.

Chapter 13 debtors may not separately classify student loans from other unsecured claims on ground that the student loans are nondischargeable. 11 U.S.C. §§ 1322(b)(1) and 1122.

01/03/1991

In re: Joyce E. Heiser (Case No. 90-02059, Filed 08/09/90)

Failure to allege facts that would establish substantial cause justified denial of motion to file refused documents. Had substantial cause been alleged and established, a hearing on the merits of the objection to the motion for relief from stay would not have been warranted under Local Rule 14(g)(2)(A) because the objection to the motion for relief from stay failed to comply with the requirements of Local Rule 14(f)(2).

Seeking and maintaining employment were not the equivalent of creating or giving consideration to a trust. Employee Stock Ownership Plan was spendthrift trust under Iowa law and debtor's interest in the plan was excluded from the estate pursuant to 11 U.S.C. § 541(c)(2). Alternative analysis noted that, unlike Carver, there was no specific exemption under Iowa law for the plan; that ERISA did not preempt Iowa Code section 627.6(8)(e); and that debtor would not meet "reasonably necessary for the support test." 116 B.R. 1015 (Bankr. S.D. Iowa 1990)

Nebraska Public Employees Retirement System was construed as a spendthrift trust under Nebraska law and debtor's interest in the fund was excluded from the estate pursuant to 11 U.S.C. § 541(c)(2). Alternative analysis noted that, unlike Carver, debtor could not utilize specific exemption under Nebraska because law of domicile (Iowa) controlled exemption issue; that ERISA did not preempt Iowa Code section 627.6(8)(e); and that further evidence would be required on "reasonably necessary for the support" test. 116 B.R. 1005 (Bankr. S.D. Iowa 1990)

City of Omaha Employee Retirement System was construed as spendthrift trust under Nebraska law and debtor's interest in the fund was excluded from the estate pursuant to 11 U.S.C. section 541(c)(2). Alternative analysis noted that, unlike Carver, debtor could not utilize specific exemption under Omaha Code because law of domicile (Iowa) controlled exemption issue; that ERISA did not preempt Iowa Code section 627.6(8)(e); and that debtor would not meet "reasonably necessary for the support" test. 116 B.R. 995 (Bankr. S.D. Iowa 1990)

IPERS construed as a spendthrift trust under Iowa law and excluded from the bankruptcy estate pursuant to 11 U.S.C. section 541(c)(2); however, debtor could reach her mandatory contributions and accumulated interest in IPERS as of the petition date because as a terminated employee she could seek refund of those amounts and, therefore, her interest in the fund did not benefit from the spendthrift character of the fund itself. Her interest was exempt from the estate by operation of Iowa Code section 97B.39 which provided a specific exemption for IPERS. 116 B.R. 985 (Bankr. S.D. Iowa 1990) 20 BCD 1353

Motion for reconsideration of finding that Chapter 13 plan had been filed in good faith denied. Fact that IRS discovered after the confirmation hearing that it did not hold a priority claim was not a ground for reconsideration under Fed. R. Bankr. P. 9024. Note: In re LeMaire, 883 F.2d 1373 (8th Cir. 1989) was vacated and rehearing en banc was granted. See In re LeMaire, 898 F2d 1346 (8th Cir. 1990).

FCB not entitled to relief from stay pursuant to section 362(d)(1) where evidence failed to establish a decrease in the actual value of the rental payments which constituted part of FCB's secured claim. However, Chapter 12 debtor directed to segregate or otherwise to account for the payments in accordance with section 1205(b)(4). Noted that FCB did not seek payments pursuant to sections 363 and 1205(b)(3).

Compelling reasons existed to deny the SBA the right to pursue an administrative offset of ASCS-CCC program benefits. 104 B.R. 125 (Bankr. S.D. Iowa 1989)

07/17/1989

In re: Ralph Bunche Lassiter (Case No. 88-02315, Filed 10/25/88)

For purposes of section 1325 (a) (5) (B) (ii), IRS' allowed secured claim was based on estate's interest in property and did not include property which had been exempted from the estate; however, in accordance with section 522 (c) (2) (B), debtor could not avoid IRS' lien in exempt property. 104 B.R. 119 (Bankr. S.D. Iowa 1989) Appeal withdrawn by the United States on September 8, 1989.

Seizure of Debtor's property by IRS did not violate the Fourth Amendment under the facts of the case; sale of seized property was within discretion of IRS under the facts of the case; allocation by IRS of voluntary payments in absence of taxpayer direction did not violate the Fifth Amendment.

Under facts of case, payments received pursuant to settlement agreement were exempt under Iowa Code section 627.6 (8) (e). Debtors' plan was proposed in good faith. Under facts of case, lump sum payments to be received in future did not impact on confirmation findings.

I. Unsecured creditor is not entitled to more than the present value of its unsecured claim; II. Undersecured creditor did not establish that debtor was solvent at time of confirmation; III. Amortization of claim secured by real estate over 25 years with balloon payment at end allowed; IV. Resolved by parties; V. Debtors were not required to submit disposable income to plan payments where debtors were paying their only unsecured creditor in full as of the effective date of the plan; VI. Second lien holder's claim was adequately protected under facts of case. 93 B.R. 657 (Bankr. S.D. Iowa 1988)

10/31/1988

In re: Bluridg Farms, Inc. (Case No. 87-00251, Filed 02/02/87)

I. Best interest of creditors test should be analyzed as of or close to the time of confirmation, rather than as of the petition date; II. 7-year payment term on maintained machinery was reasonable; III. Mortgage lien could be extinguished upon discharge; IV. Adequate protection under section 1205 not warranted where value of collateral had not declined; V. Feasibility determination continued pending amendments to include, among other things, price assumptions; VI. Debtors were not responsible for unreasonable delay as contemplated by section 1208. 93 B.R. 648 (Bankr. S.D. 1988)

I. To extent mortgage lien exceeded value of real estate, lien would be void upon discharge; II. Lien on coal royalties pursuant to granting clause in mortgage attached upon execution of the mortgage and, based on the specific facts of the case, was perfected when the mortgage was filed with the county recorder; mortgage holder was not required to exhaust land first because royalties served as primary security and equitable doctrine of marshalling did not apply; and mortgage holders' interests in postpetition royalties were not cut off by section 522 (b). 93 B.R. 183 (Bankr. S.D. Iowa 1988)

Prepetition dissolution and termination of partnership did not allow individual partners to claim exemption in partnership property where partnership debt had not been paid. Aff'd, Nos. 88-1629-E and 88-1630-E (S.D. Iowa, filed April 19, 1989).

Under facts of case, creditor did not sustain burden of proving by clear and convincing evidence that debt was nondischargeable under § 523(a)(2)(A). Note: Decision was rendered prior to U.S. Supreme Court's adoption of a preponderance of the evidence standard for the burden of proof in dischargeability determinations. Grogan v. Garner, __ U.S. __, 111 S. Ct. 654, 112 L.Ed.2d 755 (1991).

Under facts of case trustee failed to establish that the debtor intended to hinder, delay or defraud a creditor by her pre-petition sale of two vehicles for $7,000 and subsequent use of the proceeds to purchase life insurance policies to protect her two sons. 11 USC § 727 (a) (2) (A).

SBA motion to set off debt of ASCS-CCC against its claim denied based on a lack of mutual capacity between the two governmental units. 18 BCD 194 88 B.R. 922 (Bankr. S.D. Iowa 1988) Rev'd (capacity finding) and remanded (for further findings on the equity or setoff) sub nom. United States of America v. Mehrhoff, No. 88-1488-A (S.D. Iowa, filed March 21, 1989).

FmHA waived right to claim setoff under facts of case - - proof of claim filed long before agency raised setoff issue indicated the claim was not subject to setoff.

06/28/1988

In re: Donald Ray Wubbena (Case No. 87-02258, Filed 09/09/87)

Services rendered in connection with appeal and discharge and dischargeability did not benefit estate under facts and accordingly attorney fees requested for such services were not compensable under § 503 (b) (2).

Under facts of case FmHA did not have a purchase money security interest (PMSI) in certain collateral - - it was not the seller of the property; it did not extend value prior to the debtors' acquisition of rights in the collateral; and the value extended satisfied claim and extinguished PMSI of third party.

FCIC's motion to dismiss adversary proceeding as to FDIC in its corporate capacity denied. Chapter 11 trustee was not pursuing a debt of a failed bank but rather was seeking to recover sums the debtor may have transferred to the failed bank in a preferential or fraudulent manner.

No violation of the debtors' discharge, no grounds for injunctive relief and no contempt found where enforcement of in rem lien rights - - not collection efforts based on personal liability of debtors - - was pursued in state court after discharge in bankruptcy. Aff'd Melbourne Savings Bank, et al., No. 88-1458-B S.D. Iowa, filed December 28, 1988. Appeal dismissed upon compromise and stipulation.

Application to approve employment of attorneys for petitioning creditors in an action commenced under section 303 denied as unnecessary. Subsections 503 (b) (3) (A) and (b) (4) require notice and hearing with respect to the approval of certain costs as administrative expenses. But see section 503 (b) (3) (B).

05/24/1988

In re: BROWN EVELYN VANDENBURG (Case No. 85-00849)

Claim based on debtor's failure to pay premium for issued crop insurance denied administrative priority because debt arose from transaction between creditor and individual (debtor) before petition was filed.

Party challenging third party appraisal must clearly demonstrate that appraisal is fundamentally flawed; where carryover increased over life of plan, front loading did not mask any defect in the operation; final feasibility determination precluded by debtors' failure to provide price assumptions; Hunerdosse and Butz followed. Remanded to Bankruptcy Court for approval of stipulated settlement. U.S.A. on behalf of FmHA and CCC v. Dodder, Case No. 88-104-D-1 S.D. Iowa, filed Sept. 30, 1988.

Under facts of case, creditor failed to establish fraudulent conversion of non-exempt property into exempt life insurance policies. However, court sustained objection to exemption as to debtor who frustrated discovery efforts of creditor. Aff'd (as to Shirley Crozier) and limited remand (as to Donald Crozier), In re Crozier, No. 88-1306-B (S.D. Iowa filed June 8, 1989). Clarification pursuant to limited remand in Civil No. 88-1306-B (Bankr. S.D. Iowa filed June 23, 1989). Aff'd (as to Donald Crozier), In re Crozier, No. 88-1306-B (S.D. Iowa filed July 26, 1989). Noter: House File 649 became effective at or about the time this order was filed but did not apply by operation of section 9, paragraph 2.

05/16/1988

In re: Russell D. Rice (Case No. 87-01554, Filed 06/09/87)

Attorney who was unsecured prepetition creditor was not "disinterested" as required by 11 USC § 327(a); failure to disclose "interest" in § 327 application warranted disallowance of § 330 application for postpetition expenses; prepetition expenses for work in Ch. 11 allowed by distribution delayed pending availability of funds in converted Ch. 7 case.

Deferred judgment was not a final judgment that triggered the doctrine of collateral estoppel. Accordingly, summary judgment on issue of dischargeability was denied. Aff'd Iowa Power and Light Company v. Perrine, No. 88-108-W (S.D. Iowa, filed May 23, 1989).

Butz offset analysis followed; program payments were not earnings from services performed; deficiency and diversion payments were not "proceeds" for purposes of the UCC; under facts of case security agreements were insufficient to give FmHA a security interest in "general intangibles" - - if had been sufficient, Halls would apply; FmHA had interest in prepetition crop-debtor did not meet requirements of 11 USC § 506 (c); Simmons lien avoidance upon discharge analysis followed - - noted value of exempt property would be deducted from allowed secured claim. Note: Chief District Court Judge Vietor ruled on the appeal in Hunerdosse and District Court Judge Wolle subsequently ruled on the appeal in Butz and Mehroff (#134).

The FmHA was not entitled to CRP benefits under the rents and profits clause of the mortgage nor under administrative offset provisions; Halls discussed - - the FmHA did not establish an exception to the encumbrance prohibition. 86 B.R. 595 (Bankr. S.D. Iowa 1988) Rev'd (offset--capacity finding only) and remanded (for further findings on the equity of offset) sub nom. United States of America v. Butz, No. 88-366-A (S.D. Iowa, filed March 21, 1989).

11 USC § 1225 (b) (1) (B) requires Ch. 12 debtors to commit disposable income for three years of plan. Amount of disposable income must satisfy best interest of creditors test at a minimum; actual amount to be determined on annual basis. 85 B.R. 829 (Bankr. S.D. Iowa 1988)

Objection to nonfarm debtors' claim of exemption in towing and tree trimming trucks as "tools of the trade" sustained per Van Pelt line of decisions; objection to life insurance policy purchased after the petition was filed with proceeds of policy that was exempt at time petition was filed overruled; under facts of case, the homestead was acquired prior to contracting debt. Aff'd Fox v. Hutton, No. 88-1341-A (S.D. Iowa, filed December 30, 1988). Aff'd Fox v. Hutton, 893 F.2d 1010 (8th cir. 1990).

03/31/1988

In re: GRADY JAMES (Case No. 87-01254)
In re: United States of America vs. James Grady and Jane Grady (Case No. 87-00150)

11 USC § 523 (a) (7) (B) three year limitation did not apply to civil penalty imposed by Secretary of Agriculture.

Under facts of case certain obligations under dissolution decree were not in the nature of alimony, maintenance or support and therefore were not nondischargeable under 11 USC § 523 (a) (5); under facts of case and pursuant to Iowa Code § 624.23 - .24, plaintiff did not hold judicial lien in property - - hence Sullivan did not apply; Nehring applied; fees and expenses not allowed.

Upon rejection (by choice or by operation of law), nonresidential real property lease is no longer property of the estate and property must be surrendered to lessor. 11 USC § 364(d); new lease arrangement usually does not require court approval.

"Contract rights" under security agreement did not include interest in or lien on rent proceeds.

02/29/1988

In re: DUKES RODGER A (Case No. 87-00830)

Under the facts of the case, the debtors did not defeat FmHA's pre-enactment security interest nor its purchase money security interest. Intent of parties was expressed in clear and unambiguous language.

02/29/1988

In re: SHIRLEY RHODA LOU (Case No. 87-01436)

Debtor's obligation to pay debt guaranteed by another must be addressed in plan; that debt may be nondischargeable in Chapter 7 is a factor considered in assessing debtor's compliance with § 1325 (a) (3).

02/26/1988

In re: Larry D. Reynolds (Case No. 87-00758, Filed 03/23/87)

Bankruptcy court does not have the power to waive filing and docketing fees on appeal.

Adequate protection via fair market cash rent reduced by costs of receivership, taxes due and becoming due and insurance costs. No deduction allowed for cost of CRP seeding.

02/19/1988

In re: Linda S. Smith (Case No. 87-02145, Filed 08/27/87)

Trustee's objection to exemption overruled and turnover application denied where life insurance policy was unmatured (insured was living and cash value would not equal face value until 2054) and where proceeds of sale of nonexempt vehicles were used to purchase exempt life insurance policy on eve of bankruptcy. Note: 1988 change in Iowa exemption laws.

02/09/1988

In re: Stephanie Richele Rogers (Case No. 96-00860, Filed 03/11/96)

Dismissal with prejudice of complaint to determine dischargeability warranted under the facts of the case.

Cash rent and proceeds from sealing crop were farm income under facts of case; idling acres and disclaiming portion of farm did not constitute gross mismanagement under §§ 1204 or 1208 under facts of case. 82 B.R. 490 (Bankr. S.D. Iowa 1988)

"After-acquired property" clause in pre-enactment security agreement did not defeat motion to avoid lien in property acquired after the enactment of the Code. Extent of non avoidable pre-enactment lien is amount of adjusted pre-enactment debt or value of collateral, whichever is less.

01/19/1988

In re: BODEN CLARKE E (Case No. 86-03323)

Under facts of case, annuity was reasonably necessary for debtors' support and therefore was exempt under Iowa Code § 627.6 (8) (e).

Employee of farm corporation who had stored tractor and mixer and whose cessation from farming was more than temporary was not entitled to claim those items exempt under Iowa Code § 627.6 (11). 81 B.R. 519 (Bankr. S.D. Iowa 1988)

Bank failed to establish constructive possession based upon "possession upon default" clause in security agreement; under facts of case, custom farmer qualified for § 627.6 (11) (a) exemption; under facts of case, spouse had only temporarily ceased farming and was eligible for farm exemptions.

Debtors who were employees of family farm corporation were not thereby automatically ineligible for Chap. 12 relief. The debtors were engaged in farming and met the debt test. However, appropriate evidence on the income issue had not been presented. 81 B.R. 509 (Bankr. S.D. Iowa 1987)

FmHA did not have an enforceable security interest in CCC program payments; had a lien attached to the 1986 payments (approved before the OFR) no lien would have attached by operation of § 552 (b) to the 1987 payments (approval after the OFR); the 1986 payments were property of the estate, not exempt under § 627.6 (9) (c), but the property had been abandoned without objection. 81 B.R. 504 (Bankr. S.D. Iowa 1987) Aff'd United States v. Mattice, Case No. 88-22-W (S.D. Iowa, filed Oct. 3, 1988). Dismissal of Circuit Appeal by U.S. (filed 1/31/89).

Camper which served as shelter and as means of conveying equipment was not a tool of the trade under ӳ 627.6 (10); non wager earner could not claim § 627.6 (9) (c) exemption in wages earned by spouse. 82 B.R. 92 (Bankr. S.D. Iowa 1987) 16 BCD 1288

County was proper party and county attorney was proper representative in action involving contempt of the automatic stay.

12/14/1987

In re: BOLLMAN DORAN L (Case No. 87-01297)

Under facts of case, horses found to be related to a normal farming operation and held exempt pursuant to Iowa Code section 627.6 (11); gas tax refund and income tax refund held exempt pursuant to Iowa Code section 627.6 (9) (c).

Whether trust fund was property of the estate required additional evidence regarding the enforceability of the trust agreement under applicable non bankruptcy law. (See attached order on motion to reconsider and Dec. No. 105.)

"Costs of operations" were not deductible from gross receipts in computing gross income from trucking operation. Accordingly, more than 50% of debtors' gross income was derived from trucking rather than from farming. 78 B.R. 934 (Bankr. S.D. Iowa 1987) 16 BCD 651

State court receiver had no power to settle setoff and preferential transfer claims. 78 B.R. 930 (Bankr. S.D. Iowa 1987) 16 BCD 772 Aff'd Craig v. Douglas County Bank and Trust Co. 87-116-W (S.D. Iowa, filed October 11, 1988). Appeal to the Eighth Circuit dismissed on June 28, 1989 by the court upon its own motion for lack of appellate jurisdiction.

Attorney representing both Chapter 7 debtor and officer of debtor did not have a conflict of interest. Absent notice requirements of BR 9019 and 2002 (a), proposed settlement or compromise is unenforceable. Trustee's application to compromise and settle claim failed to meet established criteria.

Judgment for compensatory damages was held nondischargeable under facts pursuant to 11 USC § 523(a)(6). Jury's refusal to impose exemplary or punitive damages had no bearing on willful and malicious standards of (1) wrongful act, (2) intentionally done,(3) necessarily producing harm and (4) without just cause or excuse.

09/28/1987

In re: HAYES JESSE EARL SR (Case No. 86-01591)

11 USC § 547 action did not lie where transfer of funds did not occur within 90 days of the filing of the petition and, alternatively, where aggregate value of relevant property in primarily consumer debt case did not exceed $600.

Where the sheriff's sale was stayed by filing of bankruptcy petition, property in issue remained property of the estate. Whether permitting receiver to remain in possession would be in best interests of creditors pursuant to 11 U.S.C. § 543 (d) could not be determined on the stipulated facts. Pending motion to convert based on Wamsganz noted.

09/25/1987

In re: SMITH LYNN PAUL (Case No. 86-03391)

Under facts of case, custom farming work by debtor otherwise employed off the farm qualified him as a farmer for purposes of Iowa's exemption statute. 78 B.R. 922 (Bankr. S.D. Iowa 1987)

11 USC § 542 action deemed premature and abstention proper where issue of debtor's entitlement to settlement proceeds of insurance agreement was pending in state court. If it were determined that debtor held monies in trust for another, such funds would be property of the estate under 11 USC § 541 (a).

Failure to perfect pursuant to section 554.9312 (4) not fatal to purchase money security interest in lien avoidance action (Part III); pre-Code lien was not extinguished by rescheduling under the facts of the case (Part IV).

07/28/1987

In re: BUTLER LESLIE (Case No. 86-02252)

Entire homestead was exempt pursuant to Iowa Code section 561.16 in case wherein debt of only one debtor was contracted prior to purchase of homestead.

Rents claimed under mortgage pledge of rents and profits held not to be cash collateral in which creditor had an automatic interest -- bankruptcy petition was filed before any foreclosure action was commenced and appointment of a receiver was requested and granted. 83 B.R. 621 (Bankr. S.D. Iowa 1987) Aff'd Farm Credit System Capital Corp. v. Spears, No. 87-569-A (S.D,. Iowa, filed Nov. 4, 1987).

Non farm debtors could not claim freightliner tractor exempt as "implement" or "tool of the trade"; 627.6 (10) contrasted with 627.6 (11).

06/30/1987

In re: SUTHERLAND CHESTER F (Case No. 86-02736)

Although livestock and feed for livestock, were exempt pursuant to Iowa Code section 627.6 (11) (b), the liens on such items could not be avoided under 11 USC section 522 (f) (2) (B). Liens could be avoided to extent debtor established the exemption was for personal, family or household use under 11 USC section 522 (f) (2) (A).

06/30/1987

In re: GOOCH KENNETH D (Case No. 86-02615)

Debtor has burden of proving that item, upon which lien avoidance is sought, is a nonpossessory, nonpurchase-money security interest.

1986 Amendments to Iowa Exemption Statute held to be retrospective; attorneys practicing in Southern District of Iowa put on notice that failure to comply with Bankruptcy Rule 4003(b) will preclude consideration to objection to exemption in a section 522(f) action. 74 B.R. 563 (Bankr. S.D. Iowa 1987)

06/01/1987

In re: COPPI RONALD BARRY (Case No. 80-01579)

Debtors' motion to reopen bankruptcy case to discharge debt which had not been listed on the schedules and which had been the subject of subsequent state court action resulting in a judgment against the debtor was denied. 75 B.R. 81 (Bankr. S.D. Iowa 1987)

05/26/1987

In re: Herman Gerald Kelderman (Case No. 83-01439, Filed 10/14/83)

Omission of creditor's claim from court file and from subsequent distribution order of trustee resulted in windfall to other unsecured creditors. Mistake, inadvertence, excusable neglect justified relief from the payment of dividends. Order for payment vacated and corrective measures directed to be done. 75 B.R. 69 (Bankr. S.D. Iowa 1987)

Debt arising out of a settlement of a will dispute was held to be a debt arising out of a farming operation for purposes of 11 U.S.C. § 101(17) (A) where the land, which was the subject of dispute, was integral to the crop production enterprise. 75 B.R. 65 (Bankr. S.D. Iowa 1987)

Obligations to pay $ 61,000 in 4 yearly installments commencing six years after dissolution decree found to be in the nature of a property settlement (dischargeable); obligation to pay spouse awarded custody of the children $ 450 per month if that spouse vacated home thereby allowing other spouse to rent the premises was in the nature of support (nondischargeable).

03/30/1987

In re: Hawkeye Chemical Company (Case No. 86-03231, Filed 12/08/86)

Motion for mandatory withdrawal of the reference pursuant to 28 U.S.C. section 157(d) must be filed in district court. 73 B.R. 318 (Bankr. S.D. Iowa 1987) Note: Case was decided before Bankruptcy Rule 5011 went into effect in August, 1987.